Commitments and Contingencies

9 Months Ended

Sep. 30, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Environmental Matters

Substantially all of the Properties and land were subject to Phase I Environmental Assessments and when appropriate Phase II Environmental Assessments (collectively, the “Environmental Assessments”) obtained in contemplation of their acquisition by the Company. The Environmental Assessments did not reveal, nor is the Company aware of, any non-compliance with environmental laws, environmental liability or other environmental claim that the Company believes would likely have a material adverse effect on the Company.

Operating Ground Lease Agreements

Future minimum rental payments under the terms of all non-cancelable operating ground leases under which the Company is the lessee, as of September 30, 2011, were as follows (in thousands):

Year	Amount
2011	$	40
2012	160
2013	163
2014	158
2015	153
2016 though 2070	5,440
Total	$	6,114

Operating ground lease expense during the three and nine months ended September 30, 2011 was $6,000 and $240,000, respectively, as compared to $170,000 and $558,000, respectively, for the same periods in 2010.

Legal Matters

From time to time, the Company is a party to a variety of legal proceedings, claims and assessments arising in the normal course of business. The Company believes that as of September 30, 2011 there were no legal proceedings, claims or assessments expected to have a material adverse effect on the Company’s business or financial statements.

Other

The Company is obligated to make additional capital contributions to unconsolidated joint ventures of $1.4 million. The Company has other miscellaneous guarantees related to its unconsolidated joint ventures for up to a maximum of $567,000.

The Company has letter of credit obligations of $934,000 related to development requirements. The Company believes that it is remote that there will be a draw upon these letter of credit obligations.

The Company has initiated the development of seven buildings. These buildings are expected to contain a total of 1.5 million square feet of leasable space and represent an anticipated aggregate investment of $171.5 million. At September 30, 2011, Development in Progress equalled $41.9 million.

The Company is obligated to pay tenants for allowances for tenant improvements not yet completed for a maximum of $43.6 million.

The Company maintains cash and cash equivalents at financial institutions. The combined account balances at each institution typically exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes the risk is not significant.